Bernson Accepts Ethics Fine Over Legal Services

City Councilman Hal Bernson has agreed to pay $3,000 in fines to the Los Angeles Ethics Commission for accepting excessive free legal services from the law firm of City Hall lobbyist Neil Papiano.

The commission also imposed a $4,000 fine on Papiano’s law firm, Iverson, Yoakum, Papiano & Hatch, which provided legal services and other duties for Bernson when the Ethics Commission was investigating the councilman in 1997 for using officeholder accounts to buy season tickets to the Hollywood Bowl.

Bernson said Monday that he signed a stipulated settlement with the Ethics Commission indicating he did not know at the time that what Papiano was doing constituted a political contribution. Papiano’s firm also stipulated to the settlement.

“I reluctantly paid it with the understanding that I did not knowingly violate the law,” Bernson said. “If it wasn’t for the cost, I would have contested it. This [case] has cost me about $30,000 in attorney fees. It [settling] was a matter of basically not incurring a tremendous amount of additional attorney fees.”

The fine is the first of its kind issued by the Ethics Commission.

Contributions to officeholder accounts are limited to $1,000 per year. The Ethics Commission found that the value of legal assistance by Iverson, Yoakum, Papiano & Hatch exceeded the limit by about $4,700.

The stipulated agreement, released Monday, said Papiano’s law firm “merely intended to provide legal services to the councilman, and the councilman has indicated he thought he was receiving volunteer legal services from the firm.”

The agreement adds: “The councilman and his officeholder expense fund committee were never billed by the firm and the councilman and his officeholder expense fund committee never paid for the legal services . . . “

Bernson paid $1,500 in fines to the Ethics Commission in 1997 after the panel found he violated rules prohibiting the use of officeholder accounts for personal entertainment expenses when he bought the Hollywood Bowl tickets.

The councilman argued at the time that he had not violated the law requiring the accounts to be used for government-related expenses because he took constituents to concerts, where he discussed city business.

An independent hearing officer reported that Papiano told ethics officials that he would provide detailed information about how money from Bernson’s officeholder account was used to buy Hollywood Bowl tickets if ethics officials would agree to drop the case against Bernson.

LeeAnn Pelham, acting executive director of the panel, refused comment because the stipulated agreement has yet to be approved by the Ethics Commission, which meets next Monday.

Bernson has maintained that Papiano could legally make inquiries about a case as an individual, but said Ethics Commission officials felt the case crossed the line when an attorney with Papiano’s law firm appeared before an Ethics Commission hearing on the Hollywood Bowl matter.

Papiano is best known for his celebrity clientele, which has included Elizabeth Taylor, Joan Collins and Ed McMahon, but he also is considered the ultimate insider at City Hall, counting among his close friends both Bernson and City Council President John Ferraro.

Bernson and Papiano have had a long and sometimes controversial association.

Last year, The Times reported that Bernson paid Papiano $140,000 for a half-interest in an ocean-view, Encinitas condominium with an assessed value of $387,000.

Papiano represented Nederlander-Greek Inc., the operators of the Greek Theater, in lobbying the City Council for a lease extension of the city-owned venue. After The Times reported the condo deal, Bernson announced he would not vote on the lease extension to avoid the “appearance of impropriety.”

Although he denied that he received favorable treatment in the condo deal, once the transaction was reported, Bernson asked Ferraro to temporarily replace him on a council committee that was considering the lease extension, as well as a request by other companies seeking the lucrative theater contract that it be put out to competitive bidding.

In 1992, Bernson, Papiano and another couple jointly purchased the ocean-view condominium in Encinitas, near San Diego, for $350,000. At the time, Bernson owned a 7% interest and said he used the condo once a month. In a required filing with the Ethics Commission last year, Bernson disclosed that he bought Papiano’s 50% stake in the property for $140,000.

The San Diego County assessor’s office set the value of the property for tax purposes at $387,049 as of Jan. 1, 1999. Half of that would be $193,524, about $50,000 more than Bernson paid for the 50% interest. Bernson said last year that the assessor overvalued the property. But the councilman’s own economic interest statement filed with the Ethics Commission for 1998 estimated the three-bedroom condominium was worth $360,000 at that time.

Papiano also served as Bernson’s attorney in a high-profile lawsuit in 1992, the same year the two jointly purchased the condominium.